Protected Cell Company (PCC) in Liechtenstein

The demands placed on Liechtenstein's financial centre are constantly increasing. In particular, with regard to company law, the parties involved require legal certainty in respect of allocation of liability in addition to flexibility. On the basis of this consideration, the Liechtenstein Government commissioned the Chair of Company, Foundation and Trust Law to draft a bill for the purposes of introducing a model of the protected cell company into the Liechtenstein Persons and Companies Act as part of the present project. On the basis of this draft bill, the provisions on protected cell companies (Art. 243ff. PGR) entered into force on 1 January 2015. These provisions take into account economic interests and also contain numerous provisions for the protection of creditors, thus creating a balance of interests. Ring-fencing the liability of legal entities is by no means new, as the means to do so were enshrined in the Investment Undertakings Act prior to the introduction of provisions governing protected cell companies into the PGR. Furthermore, ring-fencing is also permitted through the formation of (sub-)legal entities, trusts and trust enterprises with divisions. The implementation of the provisions for ring-fencing the liability of legal entities therefore represents the careful development of the PGR.